Swire Properties flags substantial drop in first half net

Monday, June 15, 2020

Swire Properties (1972) predicted a substantial drop  in first-half net profit, dragged down by losses of revaluation of investment properties and its hotel business, and lower profits from the sale of investment properties.

The company projected there will be a HK$2.6 billion loss on revaluation of investment properties, net of deferred tax, in the first six months, compared with a gain of HK$3.6 billion a year ago.

The loss mainly reflects the effect of adverse market conditions and the coronavirus pandemic on the valuation of investment properties in Hong Kong and retail investment properties in the United States, it said.

Profits on the sale of investment properties are not expected to be as significant as that of last year.

The hotel interests are expected to make a loss in the first half, the company said.

Meanwhile, Swire Pacific (0019), which holds 82 percent of Swire Properties and 45 percent in Cathay Pacific Airways (0293), also announced that its first-half recurring results were likely to be materially worse than those for the first half last year.

Cathay Pacific has expected a substantial loss in the first half of 2020. The company also expects its subsidiary Swire Pacific Offshore to continue to make a recurring loss during the period, as demand for oil has fallen significantly amid the pandemic.